Billionaire investor sees opportunities in hard-hit telecoms sector
By Robert Clow
Published: October 30 2001 18:11
Billionaire telecommunications investor Craig McCaw is preparing to plough more money into the troubled sector, according to Robert Ratliffe, vice-president of Eagle River Investments, Mr McCaw's Seattle-based personal investment vehicle.
"Craig believes that this is one of the best [investing] environments he has seen in recent history - maybe in the last 20 years," said Mr Ratliffe. "We think so many telecom investments have been oversold."
Mr McCaw would look for opportunities where an experienced telecom management team could add value, Mr Ratliffe explained.
Mr Ratliffe declined to give specific details of where Mr McCaw saw the biggest opportunities. He noted that Mr McCaw was involved in wired, wireless and satellite communications.
He also declined to say how much money Mr McCaw might invest in distressed telecom companies. Forbes magazine estimated Mr McCaw's net worth to be $2.7bn in its October edition, which listed America's 400 richest. The magazine also estimated that Mr McCaw's wealth declined 65 per cent over the last year as a result of the telecom meltdown.
Mr McCaw has recently attracted widespread media attention because of his planned asset sales. He has been reported as selling an island off Vancouver, a 300-foot yacht, two homes, a wine cellar and some executive jets.
A private equity investor also said that he was offered Mr McCaw's venture capital portfolio a few months ago.
Mr Ratliffe said the reports had conflated two years of asset sales. "We have an airline sales business," he said, explaining that the airline sales were business as usual.
He said he was unaware that Mr McCaw was attempting to sell his venture capital portfolio. "Strategically that would not surprise me," he said, agreeing that Mr McCaw prefered to retain those investments that he could control personally.
Mr McCaw has large personal stakes in networking company, XO Communications, cellular company, Nextel Communications, and satellite company, Teledisc. XO and Nextel, the two public companies, have seen their share prices fall considerably over the last year.
XO in particular has suffered from the telecom slump. Long considered one of the strongest of the recent telecom start-ups, XO's balance sheet has recently come under severe pressure. Private equity firm, Forstmann Little, has increased its investment in the company but there has also been some speculation that Mr McCaw, who already owned 20 per cent of the company and controls 51 per cent of its voting rights, might invest more.
Building on his father's radio and cable holdings, Mr McCaw built a nationwide cellular network, which he sold to AT&T for $11.5bn in 1993.
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